The Top 10 Student Loan Tips for Recent Graduates (continued)

6. Stay out of Trouble! Ignoring your student loans has serious consequences that can last a lifetime. Not paying can lead to deliquency and default. For federal loans, default kicks in after nine months of non-payment. When you default, your total loan balance becomes due, your credit score is ruined, the total amount you owe increases dramatically, and the government can garnish your wages and seize your tax refunds. Talk to your lender if you're in danger of default. You can also find useful information at studentloanborrowerassistance.org.

7. Lower Your Principal if You Can: When you make a loan payment, it covers any late fees first, then interest, and finally the principal. If you can afford to pay more than your required monthly payment, you can lower your principal, which will reduce the amount of interest you have to pay. Include a written request to your lender to make sure that the extra amount is applied to your principal, otherwise they will just apply it to future payments. Keep copies for your records and check back to be sure the overpayment was applied correctly.

8. Pay Off the Most Expensive Loans First: If you're considering paying off one or more of your loans ahead of schedule, or trying to reduce the principal, start with the one that has the highest interest rate. If you have private loans in addition to federal loans, start with your private loans, since they almost always have higher interest rates and lack the flexible repayment options and other protections of federal loans.

9. To Consolidate or Not to Consolidate: A consolidation loan combines multiple loans into one for a single monthly payment and one fixed interest rate. This calculator can help you figure out what your interest rate would be if you were to consolidate. If consolidation is right for you, shop around for the best deal, but banks and private lenders are not making consolidation loans as often as they used to. There may be other options, but Direct Consolidation Loans from the Department of Education are definitely available.

10. Loan Forgiveness: There are various programs that will forgive all or some of your federal student loans if you work in certain fields. Public Service Loan Forgiveness is a new federal program that forgives any student debt remaining after 10 years of qualifying payments for people in government, nonprofit, and other public service jobs.  Find out more at www.IBRinfo.org. There are other loan forgiveness options available for teachers, nurses, AmeriCorps and PeaceCorps volunteers, and other professions. See a comprehensive list of loan forgiveness programs by state.